Oregon State Treasury to press Wells Fargo for major changes

Reuters Staff

3 Min Read

(Reuters) - Oregon State Treasury said on Thursday that it will press Wells Fargo & Co to make reforms in its management structure and executive compensation in light of a sales scandal that has become a major issue in Washington and on Wall Street.

State Treasurer Ted Wheeler said that Oregon trust funds, which have holdings of $1.14 billion with the San Francisco-based bank, will push for better accountability by separating the roles of board chairman and chief executive. (bit.ly/2cF7lEj)

“As a responsible shareholder, we will hold corporate leadership accountable and demand reforms including a ban on bonuses connected to fraud, ” said Wheeler.

Oregon State Treasury will also seek to “force” the company to claw back any previously paid compensation linked to deceptive practices and will also investigate potential legal action against the bank.

Wells Fargo was not immediately available for comment.

On Wednesday, California State Treasurer’s Office replaced Wells Fargo as the lead underwriter on two bond sales totaling nearly $730 million.

Wells Fargo staff opened checking, savings and credit card accounts without customer say-so for years to satisfy managers’ demand for new business, according to a $190 million settlement with regulators reached early this month.

Oregon’s investment program includes the Oregon Public Employees Retirement Fund, Oregon Short-Term Fund, Oregon Common School Fund and State Accident Insurance Fund. Its holdings with Wells Fargo is divided between $104 million in stock and the remainder in fixed income securities.

Earlier this month, activist shareholders of Well Fargo filed resolutions raising the prospect of deep changes at the bank. In addition, activist investor Needmor Fund filed a shareholder resolution calling on the bank to split the roles of chairman and chief executive, saying management needs strong oversight from the board “in light of the recent scandal.”

U.S. lawmakers called on Thursday for Wells Fargo Chief John Stumpf to resign and a top House Democrat demanded the bank be broken up because it is too big to manage.